02/04/2026

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THURSDAY | APR 2, 2026

‘Fertiliser markets could be entering sustained upcycle’

Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

KUALA LUMPUR: Fertiliser markets could be on the cusp of a more sustained upcycle rather than a short-lived price spike, as geopolitical tensions reshape global supply chains and tighten availability of key inputs. Cropmate Bhd managing director Lee Chin Yok ( pic ) said current disruptions linked to the Middle East conflict are exposing deeper structural pressures across the industry, particularly in sourcing and logistics. “Overall, we see this as the early phase of a potential upcycle, rather than a purely short-term fluctuation,” he told SunBiz , pointing to a convergence of supply constraints and resilient demand fundamentals. Fertiliser prices have already reacted sharply. Urea prices have climbed about 35% since the start of the conflict, while sulphur prices have surged roughly 40% since February, reflecting tightening global supply. However, Lee stressed that the issue extends beyond pricing. “More importantly, the situation is not just about pricing, but availa bility,” he said, noting that dis ruptions to key shipping routes such

He said the Carbon Capture, Utilisation and Storage Bill 2025 was introduced to address this gap and enable CCS activities, including cross border projects. Emry Hashim added that bila teral agreements between govern ments are still required to facilitate carbon movement and ensure alignment with international frame works. He also said liability is a critical consideration, noting that under Malaysia’s framework, CCS developers are required to monitor and assume responsibility for storage sites for at least 10 years post-closure before applying for handover to the government, subject to regulatory approval and possible extension. – Bernama cutting usage. Cropmate’s exposure to geo politically sensitive regions is mitigated through diversified sourcing, forward procurement and continuous market monitoring, allowing it to respond proactively to disruptions. Lee also pointed out that the group’s focus on blended and specialty fertilisers provides an added layer of resilience. Blended fertilisers offer formu lation flexibility, enabling the com pany to adjust input mixes based on prevailing raw material conditions, while specialty fertilisers tend to be more value-added and less price sensitive. “This combination enables us to maintain pricing discipline and product relevance, even in a rising cost environment,” he said. Unlike larger industry players that are heavily tied to long-term plan tation tenders with fixed pricing commitments, Cropmate operates on a more flexible, demand-driven model. The company primarily serves smaller plantations, traders and retailers, where pricing cycles are shorter and more responsive to current market conditions. This allows it to adjust prices more dyna mically and manage cost fluctuations more effectively during periods of volatility. “In contrast, larger players with long-term volume commitments may face greater exposure when input costs rise sharply,” Lee said. As global supply chains remain under strain, the fertiliser sector’s trajectory will ultimately depend on how geopolitical developments unfold.

capturing windfall gains. Compared with previous fertiliser cycles, including the Covid-19 pan demic, and the current Russia Ukraine conflict, Cropmate believes it is now better positioned to manage volatility. Lee said Crop

o Cropmate MD says disruptions linked to Middle East conflict exposing deeper structural pressures across the industry, especially in sourcing and logistics

reliability, shifting de mand towards suppliers with established pro curement networks and consistent delivery capa bilities. “In the current envi ronment, pricing power and market share are increasingly shifting towards suppliers with

as the Strait of Hormuz have slowed global supply flows, with parts of the market approaching what he described as a “near standstill”. For Cropmate, the immediate impact has been relatively con structive. A stronger pricing environ ment is supporting higher selling prices, particularly for inventory secured earlier, which could enhance margins in the near term. At the same time, customers are placing greater emphasis on supply

He said Malaysia is currently in discussions with Singapore and Japan on potential collaboration, with talks with Singapore understood to be more advanced. However, no agreement has been signed to date, although negotiations are ongoing and a bilateral agreement between the countries would be required before any formalisation. Earlier, Emry Hisham took part as a panellist at an industry session titled “Scaling Decarbonisation and CCUS: Transforming Offshore Assets for Sustainable Energy Production.” At the session, he said, policy and regulatory clarity remain key to unlocking CCS investments, noting that while Malaysia’s existing legal framework supports carbon injection mate has streng thened its procure ment and inventory planning, including diversifying sourcing and maintaining appropriate stock levels to mitigate supply disruptions and price spikes. The current cycle, however, presents a different challenge. “Vola tility is being driven not only by pricing but also by supply availa bility,” he said, highlighting that logistics disruptions are playing a more pronounced role this time around. On the demand side, plantation players, particularly in oil palm and durian, are beginning to adjust purchasing behaviour in response to rising prices and uncertainty. While fertiliser remains an essential input and overall demand is holding up, some buyers are becoming more proactive in securing supply earlier. “The shift is towards earlier and more disciplined purchasing, rather than a decline in demand,” Lee said, adding that most players are focusing on optimising application rather than

Emry Hisham said Petronas is awaiting the final form of the National Climate Change Bill (Ruupin) before assessing its full implications on the industry, including the imple mentation of climate obligations and carbon-related regulations. Earlier in March, the Ministry of Natural Resources and Environmental Sustainability said Ruupin is slated to be tabled in the second session of Parliament in June 2026. The Bill is intended to serve as Malaysia’s dedicated climate legis lation, establishing a legal framework for climate governance, emissions management, carbon market regu lation, as well as reporting and compliance. Emry Hisham also urged the stable supply capabilities,” Lee said. Despite the volatility, Cropmate has not experienced material supply disruptions so far, supported by its procurement planning and inventory management strategies. The company operates on a cost plus pricing model, which allows it to pass rising raw material costs through to customers. As a result, higher commodity prices tend to translate into increased selling prices rather than significant margin expansion. “Margins tend to remain relatively stable, rather than being significantly compressed or expanded,” Lee explained, adding that the focus remains on pricing discipline and continuity of supply. He noted that the group’s pro curement strategy may offer short term benefits where inputs were secured at earlier price points, although the broader emphasis is on maintaining stability rather than

Cropmate believes it is now better positioned to manage volatility.

Petronas seeks to bring forward first CO2 injection at Kasawari to 2027 KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is looking to bring forward the first carbon dioxide (CO2) injection for its carbon capture and storage (CCS) project at the Kasawari gas field, offshore Sarawak, to as early as 2027. CO2 levels, and has commenced operations at about 200 million cubic feet per day, with plans to ramp up output to support liquefied natural gas supply. government to expedite the finalisation of bilateral agreements between Malaysia and other countries to facilitate cross-border carbon movement for CCS projects. within petroleum operations, it does not fully cover carbon capture from non-petroleum facilities such as energy or gas processing plants.

made its carbon commitment. During the fabrication stage, we came up with our net zero carbon emissions target and realised the field would emit CO2. So we need to address that. “There is a gap between production and injection readiness, including identifying suitable fields for CO2 storage. Now that Kasawari is producing and emissions have begun, we are looking to expedite efforts to capture and inject the CO2 as soon as possible,” he said. Emry Hisham told this to reporters when asked on the CCS project at the Kasawari gas field on the sidelines of the Offshore Technology Conference Asia 2026 here yesterday. He added that Petronas aims to capture 3.3 million tonnes per annum of CO2 for injection under the CCS project. The Kasawari gas field is set to integrate one of the largest offshore CCS projects globally to manage high

This is earlier than its previous projection of 2029 or 2030 and forms part of efforts to reduce the group’s carbon emissions footprint. Petronas head of carbon management Emry Hisham Yusoff said the plan, which remains at an early stage of discussion, takes into account that the gas field began production in August 2024. He said Kasawari was developed before Petronas formalised its net zero carbon emissions commitment, resulting in a gap between pro duction and carbon management planning. “When Kasawari was being developed, Petronas had not yet